The entire KYC process at SlimPay: Interview with Yoann Briant

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Today, we have the pleasure of interviewing Yoann Briant, VP – Risk, Compliance, Internal Control at SlimPay, to delve deeply into the KYC and KYB processes that are at the core of our payment operations. Throughout this interview, we will take a behind-the-scenes look at these crucial processes, uncovering how we manage to maintain a thorough understanding of our customers while ensuring regulatory compliance and strengthening mutual trust.

1. What is KYC and KYB? Can you provide us with a definition?

SlimPay operates in the B2B space, and we prioritize the concept of KYB (Know Your Business) over KYC (Know Your Customer), which is more applicable to understanding individual customers.

In a nutshell, the KYB process aims to ensure that SlimPay has a perfect understanding of its customers, a strong grasp of the companies with whom we will contract and conduct business.

During KYB checks, we seek to formally identify the company that will use our services, its legal representatives, as well as its beneficial owners, i.e., the individuals benefiting from the company’s activities.

This concept of beneficial ownership is also a legal requirement, encompassing any natural person holding more than 25% of the company’s capital or having significant decision-making power.

These elements are crucial for SlimPay as they enable us to determine who will benefit from the operations processed by SlimPay.

The implementation of KYB aims to establish a comprehensive understanding of our business partners and foster mutual trust between SlimPay and the merchant.

This trust is particularly crucial in our field: that of payment services, given the nature of the operations we are involved in and the volumes of payments we handle each year.

We must ensure that the counterparty’s business activity is legitimate and compliant with applicable regulations, particularly for anti-money laundering and counter-terrorism financing (AML/CFT) purposes.

Therefore, we carry out these verifications both out of operational necessity and due to our regulatory obligations related to customer knowledge and AML/CFT.

This dual objective, operational necessity, and regulatory obligations, necessitates the utmost rigor in conducting our verifications and analyses.

Since when has regulation on KYC/KYB processes been in existence?

The first significant regulatory texts date back to the 1990s, primarily targeting financial institutions.

Since then, the obligations to implement and control them by the appropriate authorities have continued to be strengthened and expanded. The authorities’ objective through AML/CFT is primarily financial stability and the cleansing of financial flows.

Nowadays, there are obligations related to AML/CFT that apply to various types of entities, not just financial institutions, and to various professions: lawyers, notaries, real estate agents, and more.

As for financial services providers, national regulations have gradually been updated to account for changes in activities, practices, and challenges. They have been complemented by European directives, which were subsequently transposed into French law.

It’s these recent European directives that have clarified the obligation to identify beneficial owners.

At SlimPay, as an authorized payment institution supervised by ACPR, the French Prudential Supervisory and Resolution Authority, we are obliged to comply with these various obligations, and it is within this framework that we carry out our KYB verifications.

We have key texts that specify our obligations:

  • Joint guidelines from ACPR and Tracfin
  • The decree of January 6, 2021, relating to internal control in AML/CFT matters
  • And other complementary texts: directives, guidelines, ACPR positions, etc.

In summary, whether it’s a prospect on the verge of becoming a new client or an established and long-term relationship, the KYC/KYB process is essential and adheres to rigorous requirements in an extremely regulated field. It can also present a certain level of complexity in its implementation.

2. How does the KYC process work at SlimPay?

I will start by emphasizing a crucial point: there is no compromise when it comes to KYB verifications!

Why is this point important? At SlimPay, the KYB step is essential and encompasses both compliance-related checks and a risk analysis that goes beyond strict regulatory or formal requirements.

That being said, we are also aware that the KYC step comes into play very early in the relationship our teams develop with a prospect.

Our KYB team is often the second point of contact for a prospect during their integration phase, in order to compile their dossier.

It is essential for us to offer them the best possible experience, taking into consideration the concept of “user experience”.

To achieve this, we rely on a platform accessible to our prospects and clients, dedicated to KYB processes. On this platform, we have defined “customer journeys” that we have designed to be as simple and seamless as possible while ensuring strict regulatory compliance in our analyses.

I will start by emphasizing a crucial point: there is no compromise when it comes to KYB verifications!

I will start by emphasizing a crucial point: there is no compromise when it comes to KYB verifications!

The KYB process is structured to support the discussions held by our sales teams, allowing us to collect the necessary information at the right time.

This approach allows us to offer a KYB journey that is transparent, agile, and as painless as possible for our future clients.

The first step of KYB involves identifying the parties we are in discussions with and the roles and responsibilities of our contacts before proceeding with the verification of this information.

We then continue with the rest of our analyses, which are particularly aimed at assessing the risks associated with a business relationship, preventing the risk of fraud, and any money laundering risks.

Moreover, whenever there is doubt or inconsistency, we conduct further verifications to address any suspicions that may arise.

We may also decide not to engage with the prospect if necessary.

How long does the KYB process typically take at SlimPay?

This point is important as it also affects customer satisfaction.

I would say that we take the time needed to ensure the quality of our analyses and verifications. However, we are committed to minimizing the KYB process time as much as possible.

The turnaround time largely depends on the responsiveness of the merchant. When the merchant is prompt, the process can be fast. The complexity of the case can also impact the analysis timeframe, depending on factors such as the group’s structure, legal form, and activities, among others.

For a simple structure, upon receiving all the necessary information and supporting documents, we can complete our checks and make a decision within 24 to 48 hours.

On average, I would say that the typical timeframe for our portfolio ranges from 5 to 8 business days.

Does the KYB process interfere with onboarding?

If the question is understood in the sense of “disrupts onboarding,” then my opinion is no.

On the contrary, as I mentioned earlier, we have designed our onboarding process to be integrated and to accompany the commercial discussions phase.

In this regard, the KYB step can serve to enrich the discussions, especially concerning a better understanding of the client’s business. This allows us to discuss the customer journey and the integration of payment services within the merchant’s journey, the suitability of specific services, and even to make proposals regarding the configuration of customer journeys and the use cases offered by the merchant.

Furthermore, a merchant who is convinced by our solution is ready to cooperate, regardless of the necessary KYB process.

It should be noted that this KYB process is mandatory for any reputable Payment Service Provider (PSP).

It also allows us to adjust the risk management framework to align more closely with the merchant’s reality, which is in their best interest.

In summary, the KYB process we undertake is something that other PSPs are supposed to do – and, for the most part, they do. So, it might not necessarily be quicker elsewhere.

However, prioritization is sometimes necessary to meet client requirements and complete onboarding in line with our clients’ business needs.

But once again, the quality of our analyses is not compromised; we prioritize and allocate resources to specific cases as needed.

What sets us apart in KYB compared to our competitors?

At SlimPay, one of the distinctive aspects compared to our competitors certainly lies in the interface we provide. The platform I mentioned earlier, which allows users to provide the required information and attach the expected supporting documents.

Another notable difference is the timing of document requests.

We request documents relatively early in the KYB process, allowing us to make a quick decision on a business relationship, unlike some PSPs that seem to open an account quickly but only allow its operation after collecting the documents.

In such a scenario, the account can appear to be set up rapidly, but it remains unusable until all the documents are submitted, and there is a risk of a final rejection based on the document analysis.

This is a difference with SlimPay: when the account is opened, it can operate immediately, which I believe is essential for our merchants: the ability to execute transactions and access funds promptly.

In this regard, I think our approach is effective.

3. Through KYB, could you explain to us how risk management works at SlimPay?

As a payment institution, and like any financial institution, risk management is crucial at SlimPay.

KYB is a mechanism that contributes to risk management. In this regard, SlimPay aims to strike the right balance between development goals, growth, and risk exposure control, along with the implications it generates.

SlimPay has always been in a development phase, with sustained and continuous growth.

From a KYB perspective, our goal is to support and sustain this trend through the operational excellence of our KYB team while ensuring our regulatory function and our role in risk management.

In simple terms, we could accept any prospect and seek growth at any cost.

However, this is clearly not our approach, and it is not sustainable in the long run, given the risk of fraud, money laundering, etc., to which we would expose ourselves.

Therefore, we rely on internal procedures that allow us to select the business relationships we are willing to work with.

The KYB process plays a crucial role in ensuring alignment between the profiles of the prospects presented to us and SlimPay’s strategy, especially in terms of risk.

The KYB step questions the relevance of a business relationship with a prospect or an established relationship compared to the institution’s objectives. In other words, will the relationship be beneficial, or are the associated risks too high?

In cases where the risk appears excessive, we make the decision not to continue with the business negotiations.

4. Let’s revisit the concept of trust: how can merchants trust us? This is an important concept for us.

The KYB process forms the foundation of the trust we extend to the prospects presented to us by our sales team.

However, trust must be mutual, especially when it comes to transactions, payment operations, and fund management.

The thoroughness of our KYB procedures also aims to protect the merchants we work with, especially by enhancing our fraud prevention and detection mechanisms.

We implement systematic checks to prevent risks and ensure the security of the merchant’s funds.

This approach may seem complex during KYC, as it involves collecting a certain amount of information.

One of our challenges is continuous client awareness regarding fraud-related issues, which are constantly evolving and gradually adapting to organizations, incorporating artificial intelligence tools, etc., but can also manifest in the simplest form.

Our KYB verifications contribute to building “barriers” against fraud attempts, among other things.

The KYB process may sometimes appear cumbersome, but its ultimate purpose is clear: to protect the relationship we establish with our merchants, safeguard their funds, and build mutual trust.

5. Can you detail the updates to KYB during the execution of merchant operations?

Absolutely! Client file updates are essential for both the merchant and SlimPay.

For the merchant, it involves informing SlimPay of any organizational changes, changes in the scope of activities, or individuals authorized or not authorized to operate on the account.

Personnel movements, departures, arrivals, and recruitments require proactive communication to avoid disruptions in request processing and updates to risk prevention mechanisms.

It is, in fact, the responsibility of the merchant to proactively inform us of changes regarding individuals declared to SlimPay: those who can intervene in transactions and accounts, legal representatives, or beneficial owners.

For SlimPay, these updates are crucial to keep our client knowledge up to date and adjust our risk analyses. Updates are done regularly to ensure the information we have is relevant.

Let’s take an example.

If a merchant that exclusively operated in France wants to expand its business to Poland, this can represent a significant change in its risk profile.

We then need to adjust our risk management approach to account for this new potential exposure, to the benefit of the merchant as well.

In this example, will our risk management be visible in the merchant’s business operations?

Yes, we are quite transparent with our clients about the risk management approach we implement.

To revisit the previous example, the country criterion is taken into account to weigh our risk analysis, and this can result in adjustments in our dedicated mechanisms.

It should be noted that proactive risk management by SlimPay, in response to changes detected in the merchant, can lead to more significant adjustments than if the merchant informs us of these changes themselves. Hence, my invitation to our merchants to inform us of any changes on their part.

Sustainable trust between SlimPay and the merchant relies on smooth and proactive communication on both sides.

6. Can you talk about your team?

Regarding our team, it’s worth noting that it is dedicated to these operations and consists of various specialists.

But the essential point is that this team operates completely independently of other teams.

This doesn’t mean autonomously: the KYB team is perfectly integrated and works in concert with other stakeholders at SlimPay, but it remains independent in its analyses and decisions.

This ensures the quality of its analyses and the relevance of its work.

The rules are strictly followed, ensuring constant vigilance over risks, regardless of the underlying business stakes.

And finally, it’s a team that everyone stands to benefit from getting to know better, both professionally and personally.